What is the startup industry pyramid?


The startups industry is booming and will always for technology. Most businesses are coming online, for example Amazon, where you can buy anything and have it shipped to your door. This mean all business will need to transition to technology, whether desktop or mobile. Music industry and technology came together with Myspace, Youtube and will continue to use social media channels for distribution. The startups are built by founders. A person gets the idea, either build in house or bootstrap, till scale becomes a problem. The venture capital money is suitable option, if the investors are investing and scale will generate much more revenue. Without revenue, but scale, for example Twitter, the scaling costs can go up very high and could put the company in red, in proportions to revenue. In between bootstrap and scale, the founders have to determine “product market fit” or “most viable product”, to prove that the business model is sustainable. Various investment funds measure the success of a startup by pure growth, however if the ratio between scale and revenue is not maintained, the startup could be in jeopardy. The venture capitals have a tier system which is measured by the fund size. The money could be allocated from various sources, and maintain a risk level. A guaranteed return is required, however from seed stage to public offering is ten years, so it’s gives much more freedom to the early stage startups to not produce revenue. When some of these startups, struggling to produce revenue reach IPO, they take a beating on Wall Street.